We all know the benefits of having good credit when applying for a car loan, but did you know that it also plays a key role in your insurance premiums?

In a study conducted by InsuranceQuotes.com, drivers with fair credit pay an average of 28% more for their car insurance than drivers with excellent credit and those with poor credit pay 103% more.

Why is this? Car insurance companies have determined that there is a statistical correlation between your credit score and how likely you are to file a claim, and they use this correlation as the reason for raising rates for drivers with bad credit.

As a side note, FICO is rolling out a new score next year, the UltraFICO Score, that considers how well you manage your checking, savings and money market accounts in addition to how you pay back credit cards and loans. The biggest adverse credit factors will be average account balances of $400 or less (especially negative balances) and a history of overdrawn accounts. It is claimed that 70% of people who demonstrate responsible checking and savings account behavior can improve their score under the UltraFICO scoring system as much as 20 points. This can translate to a lower interest rate or the difference between approval or denial.